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Mumbai Real Estate News

No RERA Registration Number In Ads, Now A Violation Of The New Act

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No RERA Registration Number In Ads

It is now mandatory for developers to give information about their projects 1st May onwards, as per a clause in the Real Estate Regulation and Development Act, Maharashtra (RERA)

Realtors will now have to display their RERA registration numbers in advertisements after 1st August 2017, stated the State RERA chairman Gautam Chatterjee.

It is now mandatory for developers to give information about their projects 1st May onwards, as per a clause in the Real Estate Regulation and Development Act, Maharashtra (RERA). This is to enable the consumers to check the offerings made to them and whether the builders are able to keep up to the promises that they have made. IT will also be mandate for all builders to update the details of all their ongoing projects.

Also, if the promoters have already received completion certificates (CC) or Occupational Certificate (OC) for renovation, repair or re-development before 1st of May, then the registration of the project is not needed. Each phase of each project can be uploaded and promoters are required to obtain registration under this ACT for each phase individually. The require documents and disclosures must be submitted to the authority online that will provide them with a registration number.

“The realtors have been given three months’ time from May 1 to complete the online registrations of their ongoing projects and also the new projects. After August 1, 2017, they will have to compulsorily mention the RERA registration number in their advertisements,” said Chatterjee.

“Since May 1, 900 agents and 16 projects have been registered in state. Yet I am not satisfied as there are at least 30,000 projects which need to be registered immediately,” he added.

After approval of the layout by the municipal corporation, the first building can be registered and the rest can follow.

“The disclosures will be made public using IT platform. The independent regulator will see if everything is being submitted. Hence, builders should tell the truth in the disclosure. If they do not, then, it will be violation of the Act,” Chatterjee said.

There is also a provision for fast track courts that will address the complaints and the case would be resolved within a stipulated 7 days. A case cannot go to multiple courts and has to go to only one court at once. The local government reserves the right to grant all kinds of permissions for new proposal under Right to Service Act.

Chatterjee believes that this act will empower people and it is a one of the most crucial decisions of the government today. The consumer is enabled to check the status and all other details of the project online. Any fault in compliance by the builder or violation of the Act can be lodged on the website itself. He also maintains that Real Estate is a vital industry for the country’s economy. He has also promised strict action against the violators and believes that those doing good and honest work will definitely flourish.

Chatterjee also emphasized how the main aim of the act is to give homes to those who don’t possess one yet. And those consumers, who are staying in houses without occupation/completion certificates for years, must get deemed conveyance done.

Also Read: CREDAI Seeks Abolition Of Stamp Duty On Landed Property After GST Implementation

Ahmedabad Real Estate News

Under Construction Flat Booking Finds Tax Deduction Under Time Constraints

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Tax Deduction

If a buyer makes a transaction to book an under-construction flat and if he acquires it within the three-year period of the sale of his old house, then he is entitled to a tax deduction, says a ruling from the Mumbai bench of the Income-tax Appellate Tribunal (ITAT). If an apartment is booked in an under construction project than it must be viewed as a method of constructing residential tenements, says the December 18 judgment.

That means if the buyer uses the entire gain from the transaction to buy another house within two years or construct another house within three years. The two- and three-year period applies even if the buyer bought another house a year before selling the first one. But the property should have been bought in the name of the seller.

It is mandatory that within a period of two years after or one year before the date of transfer of old house, the taxpayer should construct a residential house or acquire another residential house within a period of three years from the date of transfer of the old house. The date of receipt of compensation will determine the period of acquisition or construction in a case of compulsory acquisition.

This exemption is effective and can only be claimed in respect of one residential house property purchased/constructed in India. In the case of multiple house purchases or constructions, the exemption under section 54 will be available in respect of one house only. Any purchases made outside the country does not fall under any kind of exemption. Section 54 gives relaxation in such cases by providing relief to the taxpayer who sells his residential house and acquires another residential house from the gained capital.

After the sale of an asset, the difference between the buying price and the selling price is a capital gain or a capital loss. These are further classified as long-term or short-term. If a property is held for 24 months or less, with effective from 2017-18, then that asset is treated as Short Term Capital Asset. Then an investor can make

treated as Long Term Capital Asset. Then only a Long Term Capital Gain (LTCG) or Long Term Capital Loss (LTCL) can be made on that investment.

ITAT agreed that booking of a new flat in an under-construction apartment should be considered as a case of “construction” and not “purchase”, hence following the earlier decisions of the Bombay high court and the tribunal itself. Further ITAT allowed the fact that the construction can began prior to the date of sale of the old asset. Same was stated in the earlier judicial decisions of the Karnataka high court and Ahmedabad ITAT, that the date of commencement is not relevant but it is the completion of construction that comes in relevance to section 54.

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Mumbai Real Estate News

Mumbai’s Development Plan 2034: Second Draft Sees A Steep Drop In Responses

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Mumbai’s Development Plan 2034

The second edition to the Mumbai’s Development Plan (DP) 2034 has been seeing an unenthusiastic response in comparison to the draft DP released last year.  BMC made this draft public in the month of October this year. The Brihanmumbai Municipal Corporation’s (BMC) first edition of the Development Plan included the open space management, steps to boost civic amenities, affordable housing, floor space index (FSI), prevent encroachments as well as outline policy on land usage, built-up area (BUA) etc.

The second part of the draft DP, covered the 111 hectares in three areas of the city, Oshiwara business district from SV Road to Link Road, Parigkhari from LBS Road to Mithi river in Kurla and the  Bandra-West A block. Till the date it has received only 28 suggestions and objections so far, deadline for the feedback being December 30. Allotted by the Metropolitan Region Development Authority to the BMC in 2016, these three areas came late as by then BMC was already done with the completion of the draft DP 2016 for the entire city

Few parties have responded to this second draft DP 2016. One of them is Bandra Reclamation Area Volunteers’ Organisation which have objected towards an entire municipal market being marked as a parking lot in the area. Vidya Vaidya belonging to the above organisation claims that they have been working for providing the area a zero-waste status. In regards to their response, she further discloses that they also suggested waste segregation centres to be earmarked in the draft.

Another organisation submitting suggestions and objections to the latest edition of the draft DP, is the Urban Design Research Institute. According to the organisation’s executive director, Pankaj Joshi, the prime reason behind the lukewarm response is that the talked about areas are small in sizes. These land parcels are house slums in Oshiwara and Parigkhari, and slum dwellers are unlikely to give feedback. He still spares a possibility of getting few more responses before the deadline.

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Mumbai Real Estate News

Reforming The Realty Market: RERA Redefines Carpet Area

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Reforming The Realty Market

To bring consistency in the sale of flats in the real estate sector, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a circular, redefining the carpet area calculation and instructing the developers to adhere to this standard, refraining away from selling on the built-up area, while creating sale agreements.

The new carpet area will be the net usable floor area of an apartment with the internal partition wall but excluding the terrace, veranda, external wall and the balcony. Built up area being the sum of carpet area, wall thickness, ducts, exclusive balcony and verandas. Super built up area is the sum of built up area and common facilities like veranda, staircase, lift etc.

Despite the mandate by the Maharashtra Ownership of Flats Act, earlier there was no mechanism to enforce the carpet area selling rule. But now after the implementation of the Real Estate (Regulation & development) Act, RERA and the establishment of the regulatory authority, this rule will help buyers to get the value of their money.

Adding class to the realty sector, this reform will set a specific calculations of area measurement for every builder instead of their own definitions of built up area. Maharashtra is among the first of the states to implement RERA and fulfil all the norms set up by the Central government for a smooth transition.

These set of new rules will increase the per square foot rate in certain areas, prices of apartments should remain unchanged. Till now the built-up area, larger than the carpet area, was the basis of the calculation of the sales price, taking down the price per sq. ft. area. Now as the carpet area been deemed as the basis for the price calculation, the prices are anticipated to be raised up to retain the profit margin.

Stopping the unprincipled developers from misleading buyers, this new definition will bring more transparency in the system. With a higher loading factor, the developer can inflate the saleable area. This allows him a room to lower the rate per sq. ft. on the inflated saleable area. This can be highly misleading as consumers easily can get attracted to a seemingly better-than-market offer. However, only the loading factor has changed and not the flat size.

“We gladly receive this move by RERA as it defines carpet area as the standard. Now each builder has to walk the same path. Earlier, various builders used to confuse the buyers by ‘setting up’ their own carpet area, built up area and super built up area” said Shirish Deshpande, executive president Consumer Rights Group, Mumbai Grahak Panchyat.

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